The rebuilding phase for online advertising has begun. While 2002 has been a stormy year for online advertising and measurement, a host of organizations and advertisers are writing the Golden Guidelines to make the industry more stable and attractive to advertisers.

		A seismic shift in the way online audience is measured is expected to leave online advertising measurement more parallel with other media.

A seismic shift in the way online audience is measured is expected to leave online advertising measurement more parallel with other media -- more accurate, more comparable among online sites and therefore easier for media buyers to calculate the value of advertising on Web sites. Strategies and research by online advertisers, publishers, technology companies and industry organizations are bolstering adoption of audience measurement that is comparable to traditional media.

The groups also are debunking the wisdom of click-through rates and monthly page view metrics and are favoring a standardized measurement metric focusing on specific attributes and audience habits -- not unlike the way traditional media are sold to advertisers.

Two major tasks are being undertaken simultaneously:

• A push for standardizing measuring online audience procedures so that audience traffic can be compared in apples-to-apples fashion.
• An adoption of reach and frequency tools to enable media buyers to understand and buy specific online demographic and psychographic groups of audiences as they do for traditional media.  A key ingredient that has been missing from online advertising measurement is the ability to discover the reach and frequency of an online audience -- the building blocks of traditional media audience measurement. If reach and frequency is measured across the medium, the result opens the door to cross-media comparability and seamless multimedia advertising campaign planning and management.

A key ingredient that has been missing from online advertising measurement is the ability to discover the reach and frequency of an online audience -- the building blocks of traditional media audience measurement. If reach and frequency is measured across the medium, the result opens the door to cross-media comparability and seamless multimedia advertising campaign planning and management.

Reach is the percentage of the total market population that will see a given advertisement over a specified period of time. Frequency is the number of times the ad appears in a given publication over a specified period of time. Reach x Frequency = Gross Rating Points, or GRP. This measure is used by media buyers when comparing potential efficacy of media placements for ads.

?The most widely quoted metric on the Internet is 30-day cumulative Reach (?Total Reach?), an estimate of the number of different people who have viewed at least one page on a particular site over the course of the measured month,? wrote researcher Steve Coffey in May for the Online Publishers Association?s first of several white papers on online audience metrics called ?The Loyal Audience.?

?Unlike in other media, however, the primary audience measurement metric, Total Reach, is not an estimate of the number of people with an opportunity to see an ad placed on the site,? Coffey said.

?Rather, Total Reach is a measure describing the site?s overall ability to attract any viewer at least once during the month, with no indication as to the quality or advertising value of those viewers, or of the site?s ability to deliver that audience for an advertiser.?

The objectives among many industry players is to demonstrate the value of the online medium to media buyers and advertisers and to expand online advertising spending from a mere 1 or 2 percent of most advertising budgets to a number more comparable with the audience that consumes the online medium.

According to SRI?s MultiMedia Mentor research in fall 2001, online media attracts 12% of the media audience?s time, following TV (52%) and radio (29%).

?We?ve spent a lot of time noting that we take 12 percent of media consumption time, but we?re only getting 1 to 2 percent of the advertising budget ,? said Michael Zimbalist, executive director of the New York-based Online Publishers Association. ?There?s been a lot of talk about how to close the gap, by giving the tools to media buyers.? (comparable traffic numbers and reach and frequency numbers.)

Another seminal study, the Dove Nutrium Bar Case Study underscores the value of audience measurement in online media. The ?media mix? study showed that rebuilding the Dove Nutrium Bar advertising media plan to include significantly more online brand advertising in the mix, would result in more brand recognition and purchase intent. The goal of the study was to determine the optimal level of advertising for each media, depending on the advertiser?s branding objectives.

In addition to reach and frequency measurement, industry leaders also are pushing for apples-to-apples comparability in Web site audience counting -- an objective that is far from being achieved across online publishing sites around the world.

?The industry needs to get on the accurate and complete measurement bandwagon, getting a quality measurement system in place and really making use of it,? said Dick Bennett, senior vice president of Audit Services and CTO of ABC Interactive. ABCi?s research about spider and unique users showed that the multiplicity of measurement methods used by online publishers resulted in vastly different audience numbers from one measurement measure to the next -- as much as 10,000 to 100,000 users on a moderately sized publishing Web site, depending on the methodology used.

?According to our PriceWaterhouseCoopers study, measurement has become the Tower of Babel,? Interactive Advertising Bureau?s Greg Stuart said. ?Every content server and ad server are counting audience differently. The big issue is, we need to make sure people are measuring the same thing.?

Among the many differences in the collection of audience data include the methods and definitions of recognizing and excluding spider and robot traffic, excluding cache traffic, standardizing acceptable ?meta-refresh? counts and even determining when advertisements should be counted -- when they are requested or when the server responds to the request.

Witness the recent industrywide efforts in online audience measurement transformation:

• Organizational: The Alliance for Online Media Measurement was introduced in June at the Advertising Research Foundation convention in Cannes, France, and will be launched in the fall. AOMM is an international organization dedicated to creating comparability to offline media, and underscoring the value of interactive advertising by enabling the measurement of individual audiences for Web sites, rather than just faceless monthly page view statistics. The AOMM?s founding members are among the advertising industry?s most powerful organizations, including American Association of Advertising Agencies (AAAA), Association of National Advertisers (ANA), Advertising Research Foundation (ARF) and Interactive Advertising Bureau (IAB). The organization is developing high-level advertiser sponsors as well.
• Guidelines: The Interactive Advertising Bureau issued its first-ever guidelines for audience measurement in January, challenging the industry?s standard of online advertising impressions, with the objective of making online advertising easier to buy and easier to understand the audience reach. The voluntary guidelines have the support of the advertising industry?s key organizations: ARF, ABC Interactive (ABCi), the Media Rating Council (MRC), the AAAA and the ANA. 
• Technology: Developers like Tacoda Systems in New York and the media company Belo Interactive in Dallas have developed software to capture valuable audience data, to enable the comprehensive understanding of online audiences, their demographics and usage habits from a media site perspective. Atlas DMT, a division of Avenue A Inc., has devised a new technology to help media buyers calculate Web site GRPs (Reach x Frequency), the essential measure to compare the efficacy of various media. 
• Media groups: The Newspaper Association of America and World Association of Newspapers are advocating for online audience measurement that is more accurate and relevant to the way users consume news Web sites.
• Research: Audience measurement research is being produced by the Online Publishers Association, Interactive Advertising Bureau, Audit Bureau of Circulations Interactive and consortia of advertisers and researchers, such as the Dove audience research funded by Unilever and the IAB.

Each online advertising stakeholder has set forth timetables and objectives to move toward an audience-based measurement.

Organizational

The Alliance for Online Media Measurement was organized, with the support of advertising leaders American Association of Advertising Agencies (AAAA), Association of National Advertisers (ANA), Advertising Research Foundation (ARF) and Interactive Advertising Bureau (IAB), to create industrywide, and worldwide metrics that enable comparability among media. 

The AOMM, led by executive director Andreas Cohen, has footholds in North America, Europe and Asia, and is signing up organizations from advertising, measurement, technology and companies that impact the online advertising industry. Advertisers include Procter & Gamble, Intel and Publigroupe.

Global standards are important because the Internet?s biggest advertisers have a multi-national presence.

AOMM was created to become a global clearinghouse for online measurement standards to create one ?currency? in online advertising measurement. Their objectives are to assist online publishers to increase interactive advertising numbers and produce accurate audience numbers, and to assist advertisers and media buyers in understanding how to compare online advertising values across media and globally.

The organization is working with both server-centric and user-centric measurement methodologies. Server-centric methodologies would include web log traffic data and auditing, while user-centric metrics would include audience demographics and psychographics captured through registration and cookie use.

Guidelines

The Interactive Advertising Bureau, established in 1996, has made among its missions the creation of guidelines for the online advertising industry to rally around. The IAB has created audience measurement guidelines, including the suggested rules for eliminating spider and robot activity from web log statistics. issued its first-ever guidelines for audience measurement in January, with the objective of making online advertising easier to buy and easier to understand the audience reach. The voluntary guidelines have the support of the advertising industry?s key organizations: ARF, ABC Interactive (ABCi), the Media Rating Council (MRC), the AAAA and the ANA.

"These voluntary guidelines for ad campaign measurement and audits are a milestone in the growth of the interactive advertising industry as they are focused on creating a consistency among all parties to the process," said IAB?s Stuart. "These guidelines, backed up by the master list of spiders and robots that ABCi has created, are expected to eliminate between 50 and 70 per cent of the discrepancies that now exist. These guidelines provide benchmarks from which our industry can now be effectively audited."

The guidelines have been called a ?wake-up call? for clients, publishers, agencies, research organizations and ad-serving companies? because the standardization of measurement practices is the first step to accurately compare Web site traffic. The IAB has called for quick adoption among online publishers.

The AOMM also counts audience measurement guidelines among its missions. The vast array of approaches to counting audience across publishing Web sites around the world has made it necessary to create the AOMM global clearinghouse for online measurement guidelines and creating one ?currency? to compare Web site audience in ?apples to apples? fashion.

Technology

Dave Morgan, former CEO of the ad-serving company Real Media last year launched Tacoda Systems in New York, a technology company that has developed software to assist online publishers in capturing audience demographics and user habits, which can be used to deliver targeted advertising. 

?For Web site publishers, data is coming in through silos -- they collect info from ad server, from server logs, from site registration, email addresses from newsletters and contest registration, etc. But nowhere is the information being cross-matrixed into profiles and being used,? said George Simpson,spokesman for Tacoda. 

?The ultimate goal is to find out who is coming onto your site, and by their actions, understand what value they represent to you.?

The transformation in mindset to an audience-based mindset will be a challenge, Morgan said.

?Most publishers have been looking at profitability as ?how much are we taking in and how much do we have going out?,? Morgan said. ?In a few media companies, they are looking at what audience they are attracting, how valuable is that audience, and how can they retain them profitably.?

The media company Belo Interactive in Dallas has developed content management software called VelocIT to also capture demographic information on their audiences online through mandatory registration and tracking with cookies. The result is a database of profile information about their users that they can use to target advertising and get higher advertising rates. 

Belo Interactive has 1.1 registered users in its database, and is using the demographic information to target advertising based on audience segments. Belo charges more than $100 CPM for advertising on its opt-in email, according to Eric Christensen, BI?s VP and general manager at Connections in Denver in July.

For media buyers, Atlas DMT has created a technology to calculate a Web site?s reach and frequency, the measures that show the extent to which the audience is reached -- proof of a return on investment for marketers.

To calculate ?Gross Rating Points,? or GRPs, the product of Reach x Frequency, audience demographics information, such as that from comScore panel-based audience research, must be calculated along with audience-to-reach ratios. Atlas DMT?s parent company, Avenue A, uses its many years as a third-party ad server to create audience impression-to-reach curves for the top 500 sites.

The formula allows researchers to determine how many males aged 18-34, for example, are exposed to an ad three times at a given site, much like how TV time is bought.

"The point I want to make to all publishers is that there's now a way to monetize 99% of inventory that's never clicked on. Being able to reach males aged 18-49 provides value to advertisers," said Young-Bean Song Director of Product Analytics for Atlas DMT in an interview with Iconocast in May.

Media Groups

A collective sense of frustration among U.S. news Web sites over the vast differences between comScore/Media Metrix and NetRatings panel-based audience numbers and individual news publisher web log numbers was the impetus for creation of the Newspaper Association of America?s audience measurement panel launched in 2000. The panel members studied the issues, but no conclusions were ever published.

?We wanted to get a better handle on measurement, and didn?t think Media Metrix and NetRatings were accurately capturing what was on going on with local news site measurement,? said Randy Bennett, VP for new media and audience. ?It?s expensive (for Media Metrix, etc.) to build panels and drill top below the top 30 markets. We realized that newspapers alone weren?t going to have an impact on these guys.?

Panel-based measurement is flawed, he said, because at-work, military, education and other parts of the Web universe are not counted or are undercounted. The industry needs an accurate picture of audience numbers, Bennett said.

The World Association of Newspapers are advocating for print and online audience measurement that more accurately reflects the way the media are consumed. Eamonn Byrne, Deputy Director General of WAN, says that despite the databases filled with demographic information of newspaper readers, media buyers choose not to tap into that information as readily as making decisions the way they always have. Turning around the habits of media buyers might be one of the biggest hurdles to online audience measurement -- to persuade buyers to use the data to make decisions.

?We can measure groups in fine details. Still, advertising agencies don?t seem to adopt it,? Byrne said. ?Advertising agencies have hijacked the method by which advertising is bought and sold.?

But Byrne points out that reach and frequency measures alone will not be enough to illustrate value for each media. Each media has values beyond reach and frequency. For example, TV has the ability to reach large numbers of people, newspaper advertising can carry more complicated messages and online advertising and direct mail can be targeted.

The common currency of reach and frequency across media enables advertising agencies to create multimedia sales schedules, but the variables beyond reach and frequency make the schedule difficult to execute accurately.

?A multimedia sales schedule is tricky for a number of reasons,? Byrne said. ?It assumes the channels have the same value. It supports the idea that reach and frequency are the only game in town. It will give media buyers a lever to compare newspaper (cost per thousand) impacts (with) electronic/broadcast. To make this fly you need to include an accepted currency that takes into account the value of the channel and its impact on the message, and then creative?s huge impact.?

Research

Several advertising organizations are researching the strengths of online audience-based advertising to bolster the new metric. Witness: 

• The Online Publishers Association plans to roll out a series of studies about audience measurement. The first installment, The Loyal Audience, was released in May. The paper explores audience measurement -- monthly unique visitors -- the dominant audience metric, and explains why it is not a useful measure of a site's advertising value. The study compares audience data using analysis by Media Metrix and comScore to illustrate comparability among media. Upcoming releases will include The Value of Media Audience Loyalty for Brand Advertisers, to be released in the fall.
   
• The Audit Bureau of Circulations Interactive has released two studies on preferred methods of measuring web log traffic. The first is about properly counting unique users, and the second is about the challenge and the importance of eliminating spider and robot traffic from web log statistics, including applying an ever-expanding list of spiders and robots. (Full disclosure: the author of this article also co-wrote these white papers). A number of variables make it difficult to count web traffic accurately, including differences in site audience composition, the variety of sites users come from, the percentage of users accepting cookies, difficulties counting proxy server traffic from the likes of AOL, difficulties tracking the users who do not accept cookies. 

?The spider and unique user research showed that measurement isn?t a simple task. It?s rather complex and not as straight forward as people would like or have suggested, but there are tools out there that show who the real (users) are out there, and how many of those real people are accessing content and are exposed to ads,? Bennett said.
 
Borrell & Associates released in April a report about what advertisers want from online newspaper sites and what advertisers want in terms of audience measurement, in cooperation with the Newspaper Association of America. The majority (89 percent) of the advertisers surveyed said they used some criteria for buying ads online, particularly demographic and psychographic information, return on nvestment, geo-targeting. Only one-fifth of the group used reach, or unique user numbers, to assist them in decisions about buying media.
 
?Sometimes media planners don?t want to fuss with measurement,? said Mike Donatello, vice president for Borrell & Associates. ?Measurement (analysis) requires them to go further. If they have a choice between two vehicles, and one requires brain power to use and one no effort, they?ll likely choose the one with no effort.?

The second phase of the Borrell research, to be available this fall, will explore measurement practices of newspaper sites and will contrast this with the findings from the first report. Each report costs $595.
 
The IAB, in concert with Dove and Dynamic Logic, have produced research about reaching the optimum media mix and targeted audience in a multimedia advertising campaign. The research was funded by Dove and the IAB, and conducted by IAB researcher Rex Briggs and Dynamic Logic.
 
According to the study, if Dove would have put 15 percent of its advertising resources online vs. the 2 percent they were spending, they would have gotten an 8 percent rise in brand metrics, including brand awareness, brand imagery (recognition of specific ad messages) and purchase intent, said Stuart, president and CEO of the Interactive Advertising Bureau, which was a partner in the study.

?In a nutshell, it tells marketers you can quantify the effect of your ad campaign on your key branding goals, you can quantify it down to the dollar and cent of effectiveness,? said Rex Briggs, the researcher who conducted the study.

After November, studies several other brands will have been studied in the same fashion as Dove Nutrium, including McDonald?s and Colgate products. Briggs says he expects the research will underscore Dove?s findings, that reaching the optimal media mix in a campaign can be cost effective and can reach the targeted audience more efficiently.

?In the last five years, people have dramatically shifted their media habits and patterns,? Briggs said.

?It probably means that marketing budgets are leaving a gaping gap for another advertiser to achieve a competitive advantage. Marketers must learn to optimize their campaigns.?

Martha L. Stone is a multimedia writer and consultant. She is the USA Director for Innovation International Media Consulting.